Its all about the money... and financial survival of the teams.

[csirl]

In my opinion, the situation we find ourselves in is down to the money. Some of the newspapers are quoting figures 400m as the difference between FOTA and Bernie. I dont know how accurate these figures are, but there is no reason to suggest that they arent off the mark - there are quotes of circuit owners paying in thr 15-20m range per event. I'm sure the TV rights are worth at least this again. There are allegations that only 50% of income is passed onto teams (implying that F1 total income is >800m).

Think of it this way. The 10 teams are being asked to adhere to a 40m budget in 2010 by F1. Even with this drastically reduced budget, the teams will have to raise the majority of the funding themselves.

Now, assume the 400m figure is accurate. Divided between the 10 teams it equals 40m each. So if FOTA takes Bernie out of the equation they could afford to pay 40m to all 10 teams. This means that even if the FOTA teams spent ZERO of their own money in 2010, they would still be able to put as good a car on the track as if they stayed in F1. Think about it. Without Bernie, the teams can survive with ZERO sponsorship and at ZERO cost to the manufacturers. Think how attractive this is to the teams in the current climate when sponsorship or manufacturer support is not guaranteed.

You have to remember that even though a lot of teams are manufacturer owned or funded, they are essentially self contained units. If the manufacturer pulls out, they do not cease to exist - they are either sold off or cast out on their own ala Brawn. If Renault pulls out, the team will revert to being independent Toleman. If BMW pulls out, the team will revert to independent Sauber. If Mercedes pulls out, the team will revert to simple McLaren. If Toyota pulls out, the team will do a Brawn. If you are a team manager, having your basic 40m guaranteed is the guarantee that you will survive. You're thinking about your own job and those of your fellow employees and are trying to keep as many as possible secure.

In summary, if you want to guarantee survival and not have to depend on the whim of manufacturers or sponsors, the only show in town is FOTA.

[Another Bob]

csirl,

Your probably right, I don't know if it's ALL about money, but hey, it will certainly will be a big part of the equation.

Something about all this over the last quarter century or so has always niggled me though.

Why oh why did the teams back then, and it was probably part of the original Concorde agreement, agree to give Burnie such a massive percentage just to manage the series?????

All I can think of is they must have all been feeling VERY VERY insecure and they saw Burnie as a caring parent to tuck them all in at night and tell them all everything was going to be OK.

25 or so years on they, being all the teams, are all like teenagers ready to leave school and head of into the big bad world and look after their own finances, leaving Burnie to be an empty nester.

[mountainstar]

Well from what I know the past 15 years teams have basically gotten the same sum with tiny steps for inflation, every year. Clearly that could not hold water any longer.

It's funny to me when Max came in back in 1992 or so he was a breath of fresh air to Balestre and now is ten times worse than Balestre and nothing but a thug tyrant who changes his mind constantly. Bernie has also lost the plot long ago and his power is slipping.

Time for change and time to break from the authoritarian FIA who BTW is supposed to be a non profit benevolent organizing body, not hitlers SS.

[P38 in workshop]

This thread could get to the core of the dispute.How did the opportunity to exploit the benefits of participating in Formula one pass from FOCA to Bernie's company?Did the teams that comprised FOCA agree to the transfer?Carlos Ghosn seems to understand the issue and the new series seems to be heading in the direction of distributing the revenue among the participants.The FIA may be called upon to sanction circuits for the new series or to publish details of the standards that apply.Similarly,FOTA could appoint their own driver assessment panel to issue licences to suitably qualified drivers.They might cost less than the inflated fees charged by the FIA for superlicences and to avoid confusion could be called hyperlicences;-).I would imagine the operators of recently abandoned circuits could be brought onside by suggesting that they could keep the gate money if they provided marshals and safety cover and FOTA gets the trackside advertising revenue.The broadcasters would probably want to cover the series with known names,and with due respect to Manor,Ferrari are a bigger name.
The bottom line is that the teams have spent and continue to spend millions.The FIA may administer the series but they have no investment in it.They have profited from selling the commercial rights and the commercial rights holder has gained from selling on those rights.In return,the teams receive some benefits.In the new series,there are no "investors" taking a percentage and if enough middle men are eliminated,more money should find its way to the teams.Yes they will need to appoint some administrators to deal with circuit booking and bulk air freight.There will be broadcast contracts to negotiate and there may be fewer organisations taking a percentage along the way.I find it inconceivable that the expertise to set up a new series should not exist among FOTA members and wish them well with their endeavour.

[Bononi]

Originally Posted by csirl

"Its all about the money..."

csirl, let me advise you with my own experience:

It's always about money !


...and money lead us to power (in all its variations, like sex).

[Marbot]

Originally Posted by csirl

If Renault pulls out, the team will revert to being independent Toleman..

Only,if like Honda,you can leave them with a small fortune.

Let's not forget how difficult it was for them to find a buyer,and that Super Aguri didn't.

And you are assuming in your scenario that the money will be shared fairly (no ones going to get 40 mil for sitting at the back of the grid),and that Ferrari will only spend 40 million (?).

Let the spending begin!

[TWK]

This finally gets to the core of it. Interestingly, it's not just F1 that finds itself in this fix. There is always the "third party" profit center that's unecessary, and provides services that should be delivered at cost in a budget provided by the teams. Sports car racing has the same problem (albeit with much smaller numbers) as was described in an editorial in Last Turn Clubhouse this week.

[csirl]

And you are assuming in your scenario that the money will be shared fairly (no ones going to get 40 mil for sitting at the back of the grid),and that Ferrari will only spend 40 million (?).

The great advantage of a team run organisation where each team has an equal vote is that the money will be shared out fairly. Nobody can dictate as consensus is required. In this type of set-up, the majority of funding will be divided equally between teams as any other proposal is unlikely to get a majority vote.

[csirl]

Quote:
Originally Posted by csirl

If Renault pulls out, the team will revert to being independent Toleman..

Only,if like Honda,you can leave them with a small fortune.

Let's not forget how difficult it was for them to find a buyer,and that Super Aguri didn't.

Again this highlights the advantages of the FOTA system. If Super Aguri had been guaranteed e.g. 40m per year in revenue, they would have survived and a buyer would have been found. Its a lot easier to sell a team as a going concern when its core budget is guaranteed.

[Marbot]

Originally Posted by csirl

The great advantage of a team run organisation where each team has an equal vote is that the money will be shared out fairly. Nobody can dictate as consensus is required. In this type of set-up, the majority of funding will be divided equally between teams as any other proposal is unlikely to get a majority vote.

I wouldn't put money on that!

Ferrari will want more than any other team,it's in their nature isn't it.Ferrari are the reason it's happening and so they'll want to be seen as being 'better' than the rest and rewarded accordingly as is the case even now.Same old same old.

Originally Posted by csirl

Again this highlights the advantages of the FOTA system. If Super Aguri had been guaranteed e.g. 40m per year in revenue, they would have survived and a buyer would have been found. Its a lot easier to sell a team as a going concern when its core budget is guaranteed.

FOTA have so far only promised engines and gearboxes (of what standard is anyones guess) for 6.5 mil.There has been no mention of how any money will be distributed or of how much there will be and what they may need to spend it on.

Ross Brawn said that FOTA will need too "help" the 'private' teams like his.Don't expect that help to come at the expense of the manufacturers own 'self-interests'.